Are Good Industrial Relations Good for the Economy?
AbstractUsing international data, we investigate whether the quality of industrial relations matters for the macro economy. We measure industrial relations inversely by strikes Ð which proxy we cross-check with an industrial relations reputation indicator Ð and our macro performance indicator is the unemployment rate. Independent of the role of other institutions, good industrial relations do seem to matter: greater strike volume is associated with higher unemployment. But these results apply in cross section. Holding country effects constant, the sign of the strikes coefficient is abruptly reversed. Although it does not seem to be the case that the line of causation runs from unemployment to strikes once we control for the endogeneity of strikes, it is also the case that support for the strikes proxy for industrial relations quality is much eroded.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 28-07.
Date of creation: Jul 2007
Date of revision: Jul 2007
strikes; industrial relations quality; unemployment; labor market institutions; cross-country data;
Other versions of this item:
- John T. Addison & Paulino Teixeira, 2009. "Are Good Industrial Relations Good for the Economy?," German Economic Review, Verein für Socialpolitik, vol. 10, pages 253-269, 08.
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-10 (All new papers)
- NEP-LAB-2007-11-10 (Labour Economics)
- NEP-MAC-2007-11-10 (Macroeconomics)
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